PFI secures extra facility

Property for Industry Ltd has secured a new $50 million liquidity facility from the Commonwealth Bank of Australia’s New Zealand branch to tide it over the Covid-19 lockdown & through the next 18 months.

Chief executive Simon Woodhams said the new facility was in addition to the bonds & syndicated bank facility PFI already has in place.

He said the weighted average term to expiry of PFI’s bonds & bank facilities stood at 3.7 years, with no expiries this financial year.

Chief finance & operating officer Craig Peirce said the NZX-listed property investor & developer had $415.6 million of bonds & bank facilities drawn at 31 December, and that position was largely unchanged.

“At that time, the company also had capital commitments over the next 24 months totalling $81.5 million, which we planned to fund using a combination of undrawn bank facilities & the proceeds from the divestment of PFI’s remaining non-industrial properties, which had a combined book value at 31 December 2019 of $119.4 million.

“Securing this additional liquidity gives the company in excess of $130 million of undrawn facilities, which allows us to meet our capital commitments regardless of the progress of our divestment programme.”

Mr Woodhams concluded: “PFI ended the 2019 financial year with gearing of 28.2% & an interest cover ratio of 4.0 times. While the negative impacts from the Covid-19 pandemic on PFI’s business are not yet clear, headroom to covenant levels & high levels of liquidity provide PFI with a strong balance sheet position.”

PFI has a nationwide portfolio of 93 properties. It secured the sale of 2 Pacific Rise in Mt Wellington on 17 December and settled the sale on 13 March.
Current gearing, as a percentage of the most recent independent valuation of the property portfolio, is well below the covenant limit of 50%, and the ratio of interest expense & bank fees to operating earnings excluding interest expense & bank fees is well above the covenant requirement of 2.0 times.

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